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The organisational problems alluded to in the notes from the June meeting continued to plague the company. It was clear that we could no longer function free-form. We needed a structure to organise all of the tasks that were underway, and a budget to help us deploy our growing, but still meager, financial resources.
I wrote this proposal in an attempt to specify a structure that approximated how the company was, in fact, already operating. It was never formally adopted, but what actually happened was not very different from what was envisioned herein. This is not a “business plan” in the venture capitalist sense; instead it was intended as a plan to develop the business, not raise money for it.
It is my feeling that the problems that beset this company are of such urgency that immediate action is required, with or without an agreed formal business plan. Herein I will discuss the actions I see as needed. I make no claim that I have prepared the requisite forecasts to back up the figures I use—they are pure seat of the pants numbers based on my gut feelings of where we are and what we can risk.
I want to immediately reorganise the company in the following divisions:
These divisions are coequal (listed in alphabetical order![[Footnote]](i/footnote.png){kind=small}
)
and all report to the president.
Each division manager shall have the authority to disburse his budget
(see below) as he sees fit. This budget may be used for compensation
of existing personnel to obtain additional work, or to bring in
outside personnel. Approval of stock offerings to new personnel will
be at the discretion of the board.
We have to start spending our money to establish this company in the marketplace. The following is my proposed monthly budgets for the above-designated divisions. These are based on seat of the pants “wing it” insight.
Marketing Division $14,000 Operations Division $10,500 Technical Division $10,500
These figures were calculated on the basis of exhaustion of our in-the-bank capital in 4 months assuming no additional revenue from sales. The budget I propose would make me extremely unhappy were I the manager of each of the above divisions. Thus, I claim it is close to reality.
The above numbers also closely equal my estimate for the net revenue from sales if we assume that Sun-Flex takes as many systems as they have taken over the last three months, and that other sales stay equal. We can augment the above figures by spending capital or forecasting increasing sales, but I would be uncomfortable with an increase beyond 25%.
I assume that any increase in sales over the next 90 days will be used to increase the above budgets proportionally. I am open to the establishment of a separate customer support division, but as there is nobody to manage it currently, now isn't the time to do it.
Existing salaries are to be paid from the above budgets. The
technical budget will pay for Greg and Duff's salaries, and the
operations budget will cover John and Jane Kern, and Kathy Marcelius.
The royalty payments to Mike Riddle and Mike Ford
are assumed to be subtracted directly from sales and are not
included in these budget figures.
The technical budget assumes that we can continue to get the machines to develop on for free and that we can do effective work in that environment. If this is not correct, we would have to steal from the Operations or Marketing budgets for equipment.
The marketing budget allows for extensive advertising and additional personnel. If the advertising can be arranged on a co-op basis, or the personnel can be recruited on a commission basis, funds from this account may be reassigned to the others.
First priority for the marketing division is the recruitment of additional marketing personnel. Within the marketing division I place the receptionist/order-taker function, as well as the customer support function. We need to have our phone answered reliably within 3 rings within business hours. We need to have a trained customer person on call at all times. We must authorise expenditures to achieve these goals. Further, we need an additional full-time marketing person, whether reporting to Mike Ford or coequal with a defined territory. Ideally we can recruit this person on a stock+commission basis. Next, we basically need to take the money left over and turn it over to Chuck Victory with the instructions “create us an ad campaign”. We don't have the resources internally to do this advertising function, so we have to buy it, regardless of the price. Perhaps upon her return, Roxie Walker could be attached to the marketing department and given responsibility for development and execution of the advertising, show, and promotion campaign, a function she has done for us in the past. We must establish ourselves as the industry leader, with brochures, advertisements, and point of sale material that confirms our position.
The operations division is immediately authorised to obtain a larger office facility and telephone and support resources as required from the assigned budget. The personnel to handle the additional telephone lines are understood to come from the Marketing budget.
The Technical Division manager is empowered to spend his budget as he sees fit to accomplish the technical goals of the company. These include the completion of the “wish list” development goals, and the conversions to various hardware products. The manager of the Technical Division is empowered to hire outside personnel or to cut special deals with Autodesk shareholders as required to complete the development agenda.
We need a way to go outside for technical tasks without causing dissension and salary bidding wars internally. Perhaps the answer might be to simply take the wish list (or conversion list), and price each item on it (along, of course, with a completion date based on the estimation of the project manager). These items would be offered internally to the stockholders, who could sign up to do them and receive payment according to the scale. (This pay would presumably be in lieu of salary for those on salary.) The residue of unassigned projects could, at the discretion of the technical division manager, and constrained by the budget, be contracted out to outside programmers at the same price scale.
Reporting to the technical project manager are the AutoCAD-86 product manager (Dan Drake) and the AutoCAD-80 product manager (John Walker). The technical project manager allocates resources among the projects.
The managers of the respective divisions must be in a position to offer stockholders full-time employment, or to bring in additional people. These decisions must be based on sound business practices based on the budget available to get the job done. I propose that each manager strike the best deal possible with each person, including compensation in stock or options if that seems acceptable (all stock offers having to be approved by the board, per my reading of our bylaws). I personally will take the heat from the existing employee/shareholders and handle any requisite renegotiations with them.
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